Hi,
palace or birdees in brisbane!
Arts Lodge Factory in Byron Bay. It might be a little more expensive than the other hostels but you'll save that money with their $2 happy hour.
In sydney I stayed in Big Hostel for a few weeks before finding a house share. Its really nice - super clean kitchen, nice rooms, clean bathrooms and its right near central station so its really easy to get anywhere - u can walk right into the CBD. I also stayed at Asylum Sydney which is more dingy but quite a lot cheaper in in Kings Cross. Both were fun - Asylum was more of a party hostel.
In Byron Bay, I agree, Arts Factory is a great time, always fun having some drinks at the Buddha Bar right next door.
In Brissie I recommend Bunk Backpackers - its in Fortitude Valley area but a short walk to the CBD.
Have fun :D
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